FT: Trump Considers Aggressive Two-Step Tariff Strategy for April 2

Updates: Policy/News/Markets, March 25, 2025

— Trump trade policy updates: · Trump targets Venezuelan oil buyers with 25% tariff. President Donald Trump announced plans to impose a 25% tariff on any country that purchases oil or gas from Venezuela. Citing concerns over migration and criminal gangs entering the U.S., Trump stated that the tariff would apply to all trade such nations conduct with the United States. The measure is set to take effect on April 2, which he dubbed “Liberation Day in America.” · Trump says he will be announcing tariffs on cars “very shortly” and on pharmaceuticals at “some point in the not too distant future.” · The U.S. “External Revenue Service” will launch on April 2, according to Commerce Secretary Howard Lutnick. · Trump said he “may give a lot of countries breaks,” a sign that the White House is beginning to factor in potential disruptions to global trade from its tariff policy. · Trump considers aggressive two-step tariff strategy for April 2. Trump is preparing a two-stage tariff strategy that could begin as early as April 2, according to the Financial Times. The plan reportedly includes the immediate imposition of tariffs as high as 50%, particularly targeting car imports. Citing lawyers and individuals familiar with the discussions, the FT reports that Trump’s team is also weighing the use of Section 301 trade investigations to scrutinize foreign trading practices. In addition, they are exploring the potential use of Section 122 of the Trade Act of 1974, which permits temporary tariffs of up to 15% in response to balance-of-payments issues. — USTR hears mixed reactions on proposed port fees for Chinese ships. The U.S. Trade Representative (USTR) held the first of two public hearings on a proposal to impose port fees of up to $1.5 million per visit on Chinese-owned and Chinese-built vessels, under Section 301 of U.S. trade law. The move, prompted by a 2024 labor union request, aims to curb China’s dominance in shipbuilding. Of the 66 public comments submitted so far, many testimonies on Monday warned the proposed fees would harm U.S. ports, shipping companies, exporters, and jobs — particularly in agriculture. Several Democratic lawmakers expressed support for the measure, while also urging the USTR to provide exemptions for companies rerouting cargo through Canada or Mexico. A second hearing with seven more panels is scheduled for Wednesday. The Trump administration says the fees would curb China’s growing commercial and military dominance on the high seas and promote domestically built vessels. “National interest will not be served if the effort to boost American shipbuilding unintentionally destroys American-owned carriers,” said Edward Gonzalez, CEO of Florida-based Seaboard Marine, the largest U.S.-owned international ocean cargo carrier. U.S. vessel operators said the fees on Chinese-linked vessels also would push more U.S. cargo to foreign-owned ocean shipping companies that have resources to better weather the change. U.S. shipyards turn out fewer than 10 ships annually while China’s produce 1,000, speakers said. Agricultural exporters already are having trouble booking ships beyond May due to uncertainty around the USTR plan. — EU, U.S. race to avert trade war amid tariff tensions. European Commission trade chief Maros Sefcovic is set to meet U.S. Commerce Secretary Howard Lutnick and Trade Representative Jamieson Greer in Washington today (March 25), aiming to ease growing transatlantic trade tensions. Talks will focus on preventing new tariffs and reinforcing economic ties, according to EU officials. The meeting follows the U.S. implementation of steel and aluminum tariffs earlier this month, prompting the EU to consider retaliatory duties on American goods. With another round of U.S. tariffs expected April 2, Brussels is holding off its response until mid-April in hopes of a breakthrough. — Top Trump officials inadvertently release Yemen war plans via accidental texts to journalist. In an extraordinary security lapse, senior members of Donald Trump’s cabinet inadvertently shared top-secret war plans for military strikes in Yemen with journalist Jeffrey Goldberg, editor-in-chief of The Atlantic. Using the encrypted messaging app Signal, Vice-President JD Vance, Defense Secretary Pete Hegseth, National Security Adviser Mike Waltz, and others exchanged sensitive operational details about planned attacks on the Houthi militia just hours before the strikes were carried out last week. — Egg industry update: Supply recovery underway despite recent setbacks. USDA’s March 21 Chickens and Eggs report shows continued struggles in egg production due to Highly Pathogenic Avian Influenza (HPAI), with only 285.1 million table egg layers as of March 1 — down significantly from both the previous month and last year. A Southern Ag Today look at the topic (link) notes this marks the lowest March count since 2011. However, pullet numbers (young hens entering production) rose 5.5% year-over-year, signaling rebuilding efforts amid strong demand and high prices. Additional signs of recovery include increased incubator activity and more eggs per 100 layers. Egg prices have dropped sharply, from $8.51 to $3.96 per dozen in March, likely driven by reduced consumer demand at peak prices rather than increased supply. Overall, while current supplies are tight, production is ramping up, and prices may continue to ease if HPAI pressures decline, the Southern Ag Today item concludes. (Southern Ag Today ) — Canada’s small farms offer clues to U.S. egg shortage. With egg prices soaring in the U.S. due to avian flu wiping out tens of millions of hens, USDA is studying how other countries manage their egg supply — especially neighboring Canada, where eggs remain affordable and plentiful. Unlike the U.S., Canada’s egg farms are smaller and more insulated from flu outbreaks thanks to colder climates, tighter biosecurity, and fewer free-range operations. While American agribusiness has prioritized scale and efficiency, this has also made the system more vulnerable to disruptions. Canada’s supply management system guarantees farmers stable income, reducing pressure to expand, whereas U.S. producers must grow to stay competitive. As Easter demand looms, the U.S. is turning to increased egg imports to ease the shortage.

— DOJ urges Supreme Court to reinstate federal worker firings. The U.S. Justice Department has asked the Supreme Court to permit the Trump administration to proceed with firing thousands of recently hired federal workers. In an emergency application filed Monday, DOJ officials argued that a California judge’s ruling — ordering the workers’ reinstatement — undermines executive authority and the constitutional separation of powers. The case involves employees on probationary status, hired within the past one to two years. Acting Solicitor General Sarah Harris warned the Court of “ongoing assault on the constitutional structure.”

— Equities today: Asian and European stock markets were mixed overnight. U.S. stock indexes are pointed to near steady openings. In Asia, Japan +0.5%. Hong Kong -2.4%. China flat. India flat. In Europe, at midday, London +0.6%. Paris +1.1%. Frankfurt +0.9%.

Equities yesterday:

(Exchanges)

— Bostic sees just one rate cut in 2025, citing tariffs and bumpy inflation. Federal Reserve Bank of Atlanta President Raphael Bostic now expects only one interest-rate cut in 2025, down from his previous forecast of two. In an interview with Bloomberg Television in Atlanta, he cited persistent and uneven inflation, with tariff increases posing fresh risks to price stability. Bostic anticipates inflation returning to the Fed’s 2% target by early 2027, pushing back previous expectations. He also warned that uncertainty from frequent policy changes — particularly under President Trump — is complicating economic forecasting. While Fed Chair Jerome Powell recently called the inflationary effects of tariffs “transitory,” Bostic avoided using the term, saying inflation could remain more sensitive in today’s environment.

Bostic’s updated projections show U.S. GDP growth at 1.8% this and unemployment ending around 4.2–4.3%. Despite the challenges, he favors keeping rates steady for now, even if that requires stronger action later. He also voiced concern that potential threats to Fed independence — like presidential firings of governors — would further complicate monetary policy decisions.

— Ag markets today:

• Grains mostly weaker overnight. Corn and soybeans faced light selling pressure overnight, while wheat was mostly lower. As of 7:30 a.m. ET, corn futures were trading fractionally to a penny lower, soybeans were 2 to 3 cents lower, SRW wheat was narrowly mixed, HRW wheat was 2 to 3 cents lower and HRS wheat was around a penny lower. The U.S. dollar index was down around 235 points, and front-month crude oil futures were about 45 cents higher.
• Cattle futures showing topping signs. Cash cattle prices surged $7.46 to a record $212.76 last week and wholesale beef prices posted strong on Monday, but live cattle futures closed lower and near session lows. After last Friday’s spike to an all-time high, futures price action suggests more long liquidation pressure is possible, despite strong cash fundamentals.
• Cash hog index slips, pork cutout firms. The CME lean hog index dropped 9 cents to $88.79 as of March 21. The pork cutout firmed 51 cents to $97.37 on Monday as all cuts except hams were higher.

— Ag trade: Japan is seeking 119,847 MT of milling wheat via its weekly tender.

— Cold Storage report out this afternoon. USDA will detail frozen meat stocks at the end of February. The five-year average is a 10.6-million-lb. decline in beef stocks and a 17.9-million-lb. rise in pork stocks during the month.

— Slovakia declares emergency after FMD outbreak. Slovakia declared a state of emergency following the detection of foot and mouth disease (FMD) at three farms, becoming the third European country to report an outbreak. The emergency status enables swift measures to contain the disease. Hungary identified FMD cases earlier this month, while Germany reported infections earlier this year.

— Agriculture markets yesterday:

(Exchanges)

— Oil prices climb amid U.S. tariffs on Venezuelan crude. Oil prices rose for the fifth straight day today as U.S. tariffs on countries importing Venezuelan crude sparked concerns of tightening global supply. Brent crude rose 46 cents, 0.6%, to $73.46 per barrel, while U.S. West Texas Intermediate gained 41 cents, 0.6%, to $69.52.

— Oil prices rose Monday amid Venezuela tariffs and OPEC+ output plans. Oil prices climbed 1% on Monday following President Trump’s announcement of a 25% tariff on countries buying oil and gas from Venezuela. Brent crude rose 84 cents (1.2%) to $73, while WTI gained 83 cents (1.2%) to $69.11. Gains were tempered by a U.S. extension allowing Chevron to wind down its Venezuelan operations by May 27. The market remains uncertain about how the tariff will be enforced. Meanwhile, OPEC+ is set to raise oil output by 135,000 bpd in May, despite ongoing concerns about compliance from members like Iraq and Russia. Talks of a Ukraine ceasefire and potential increases in Russian oil exports added to market volatility.

— EU prominent in WTO Dispute Session with moves on China EVs and palm oil compliance. At the March 24 WTO dispute settlement meeting, the EU blocked China’s first request to establish a panel over tariffs on Chinese electric vehicles, following failed consultations in December 2024. Although this initial block is allowed, China’s second request cannot be stopped. Separately, the EU committed to comply with a WTO ruling on its palm oil and biofuel policies, requesting more time and targeting January 1, 2026, for full compliance — a timeline already agreed upon in a similar dispute with Malaysia, and one it now seeks to align with Indonesia as well.

— USITC launches timeline for review of tomato suspension agreement with Mexico. The U.S. International Trade Commission (USITC) announced the timeline for its five-year review of the Tomato Suspension Agreement (TSA) with Mexico (link). The TSA, designed to prevent harm to the U.S. tomato industry by ensuring Mexican producers adhere to minimum pricing standards, is under review to determine if ending the suspended investigation would harm U.S. interests. The USITC deemed the review “extraordinarily complicated” and invoked its authority to extend the process by up to 90 days. A hearing is scheduled for Aug. 14, with written submissions due by Aug. 26 and final comments by Sept. 26.

— Canada challenges China’s tariffs at WTO. Canada formally requested consultations at the World Trade Organization (WTO) over China’s imposition of steep import duties on Canadian agricultural and fishery products. The tariffs, which took effect on March 20, include 100% duties on canola seed oil, oil residue cake, and peas, as well as 25% tariffs on select seafood and pork products. Canada argues these measures violate China’s WTO obligations. The move comes in retaliation to Canada’s earlier tariffs on Chinese electric vehicles, steel, and aluminum. If no resolution is reached within 60 days, Canada may escalate the matter by requesting a WTO dispute panel.

— GOP senators warn Trump’s agenda faces major delays in Senate. Senate Republicans are signaling that President Trump’s sweeping legislative agenda — spanning tax cuts, border security, energy reform, and defense spending — may not reach the Senate floor until late summer or even fall, due to internal GOP divisions and procedural hurdles, according to a report from The Hill (link). Senate Majority Leader John Thune (R-S.D.) has told colleagues a realistic timeline for passing a reconciliation package is July at the earliest, casting doubt on House Speaker Mike Johnson’s (R-La.) push for passage by April or May. Republican senators cite deep disagreements over tax policy scoring, potential Medicaid cuts, and the size of defense spending increases.

Senate Budget Chair Lindsey Graham (R-S.C.) said the House-passed budget will require a “major overhaul” before it can move forward in the Senate. Disputes also remain over proposals backed by Trump—like exempting Social Security benefits and tipped income from taxation—which could add up to $1.7 trillion in costs over a decade.

Some Republicans are urging the House to forge ahead to maintain momentum, but the lack of Senate consensus suggests Trump’s legislative goals could be significantly delayed.

— Democrats convene to defend SNAP amid GOP budget threats. Democratic leaders are holding a meeting this afternoon to address potential threats to the Supplemental Nutrition Assistance Program (SNAP) considering the GOP’s proposed budget cuts. Participants include House Agriculture ranking member Angie Craig (D-Minn.), vice ranking member Shontel Brown (D-Ohio), Jahana Hayes (D-Conn.), Jim McGovern (D-Mass.), and House Appropriations Ag-FDA Subcommittee ranking member Sanford Bishop (D-Ga.). The House’s budget resolution includes $230 billion in agriculture-related cuts, with SNAP bearing the brunt — raising concerns about reduced benefits for current recipients. Democrats, who have consistently defended SNAP, acknowledge their limited power to stop the cuts but aim to rally public support to pressure Republicans into reconsidering. GOP members, meanwhile, are not pleased with the meeting, which is not an official hearing due to Democrats’ minority status.

— Meat sales hit record $104.6 billion as Americans embrace protein-packed diets. U.S. meat sales reached an all-time high of $104.6 billion in 2024, with volume up 2.3% from 2023, according to the 20th annual Power of Meat report released at the Annual Meat Conference. The study reveals that 98% of American households purchase meat, and 73% view it as part of a healthy lifestyle, with protein being a top dietary priority.

Consumers now shop for meat an average of 54 times a year, spending $16.12 per trip. Popular motivations include comfort meals, convenience, and creative cooking. Food Marketing Institute’s (FMI’s) Rick Stein noted that meat is included in 90% of home-cooked dinners, while Meat Institute CEO Julie Anna Potts emphasized meat’s role as a “nutrient powerhouse” supporting both health and the U.S. farm economy.

The report was conducted by 210 Analytics for FMI and the Meat Foundation, with data from Circana and sponsorship from CRYOVAC® Brand Food Packaging.

Link to The Top 10 Findings of the Power of Meat 2025

(FMI and the Meat Foundation)

— Sweet profits: How refined sugar is powering the drink craze at fast-food chains. If you’ve noticed more vibrant, sweet drinks at your favorite fast-food spots lately — you’re not imagining it. Chains like Chick-fil-A, Taco Bell, and McDonald’s are leaning into sugary, customizable beverages to attract younger customers and boost their bottom line.

From pineapple dragon fruit refreshers to caffeine-laced frozen slushies, restaurant chains are using refined sugars and syrups — like high-fructose corn syrup and cane sugar — to create colorful, crave-worthy beverages. These ingredients blend well, preserve flavor, and deliver the sweet punch that customers expect.

Targeting Gen Z with customization & aesthetic appeal. Younger consumers love to personalize — and photograph — their drinks. Chains are capitalizing on this with:

• Build-your-own beverages (flavor bases, add-ins, and caffeine shots)
• Eye-catching colors and layers
• “Functional” extras like energy boosters or electrolytes
• These drinks aren’t just tasty — they’re social media gold

Of note: Sweet beverages carry higher profit margins than many food items. At a time when restaurants are offering food promotions to bring in traffic, drinks help balance the books by:

• Increasing average check sizes
• Encouraging impulse buys
• Creating buzz through limited-time flavors

The health factor: A balancing act. With growing concerns around sugar consumption, some chains are experimenting with:

• Natural sweeteners like stevia or monk fruit
• “Clean label” sugars and fewer additives
• Lower-sugar versions of popular drinks

Still, the bulk of the beverage boom is built on refined sugar — for now.

What’s next? As beverage innovation ramps up, expect to see even more creative use of sugar and sweeteners in national chains. Whether it’s to energize a morning or just make a colorful Instagram post, sugar-packed drinks are here to stay — at least for the foreseeable future.

— Minnesota reports first 2025 bird flu case in dairy herd. A Stearns County dairy farm has been quarantined after testing positive for bird flu (H5N1), marking Minnesota’s first confirmed dairy herd infection of 2025. The case is the second for the same 620-cow operation and the first detected through the state’s new monthly milk testing program. Officials emphasized that pasteurization effectively kills the virus, ensuring the milk supply remains safe. The Minnesota Department of Health is offering protective equipment to farmworkers, as those with direct animal contact face the highest risk. No human cases have been reported in Minnesota so far. Minnesota, a leading dairy and turkey producer, has lost over 9 million birds to the virus since 2022.

— NWS outlook: Significantly above average, warm to hot early Spring temperatures will expand over the western/central U.S. this week with numerous monthly record highs possible... ...Rain across northwestern Washington state today is expected to taper off today but the next wave of moisture is forecast to arrive later on Wednesday... ...Watching for an increasing threat of heavy rain moving into southern Texas by Thursday morning.

(NWS)

25: USDA Cold Storage report | USDA Food Price Outlook
27: USDA Hogs & Pigs report
27: MLB Opening Day
28: Personal Consumption Expenditures Price Index
29: Last day of Ramadan
31: USDA Prospective Plantings, Grain Stocks and Rice Stocks reports | Ag Prices

Economic aid for farmers | Disaster aid for farmers | Farm Bureau summary of aid/disaster/farm bill extension | 45Z tax incentive program | Poultry and swine line speeds | U.S./China Phase 1 agreement | WASDE | Crop Production | USDA weekly reports | Crop Progress | Food prices | Farm income | Export Sales weekly | ERP dashboard | RFS | IRA: Biofuels | IRA: Ag | SCOTUS on WOTUS | SCOTUS on Prop 12 pork | Gov’t payments to farmers by program | Farmer working capital | USDA Ag Outlook Forum | Eggs/HPAI | NEC task force on HPAI, egg prices | Options for HPAI/Egg prices | Trump tariffs | Greer responses to lawmakers | Trump reciprocal tariffs |